B2B Advertising

The Role of Advertising

1. Integrated Communication Programs.

2. Enhancing Sales Effectiveness.
3. Increased Sales Efficiency.
4. Creating Awareness.
 Advertising

• Cannot be a Substitute for

effective personnel selling.
• Cannot, by itself, create
product preference.
 The Decision Stages for  Advertising is only one
Developing the Business-to- aspect of the entire
Business Advertising Program marketing strategy.
 The advertising
decision process
begins with the
formulation of
advertising objectives.
 Equally important is
the evaluation and
selection of the media.
 Setting Ad Budgets:
Commonly Used Methods
Percentage of Sales
• Allocate some percent of sales to
advertising.
• Makes advertising a consequence rather
than a determinant of sales and profits.
• Useful only if possess VALID historical
data
• Most commonly used method
 Setting Ad Budgets:
Commonly Used Methods
Affordability Method
• Firm spends on advertising what it
has available to spend
• Good cash flow control
• Most common with small firms
• Sales drive the advertising
 Setting Ad Budgets:
Commonly Used Methods
Objective-Task Method
• An attempt to relate advertising costs to
the objective it is to accomplish.
• Focuses on the communications effects
of advertising, not on the sales effects.
• Generally considered the “best” method.
 Developing the B2B Advertising
Message
• Determine advertising objectives.
• Evaluate buying criteria of target
audience.
• Analyze most appropriate language
for presenting message.
Organizing the Sales Force
Typical Methods of Organizing
the Sales Force
• Line Organizations (& Line/Staff)
• Functional Organizations
• Specialization Organization
– Sales Activities
– Geographic Areas
– Products
– Customers
 A Simple Line Organization

S a le s M a n a g e r

S a le s p e r s o n A S a le s p e r s o n B S a le s p e r s o n C
A Two-Level Line Organization
S a le s M a n a g e r

R e g io n A R e g io n B R e g io n C
S a le s M a n a g e r S a le s M a n a g e r S a le s M a n a g e r

S a le s p e r s o n S a le s p e r s o n S a le s p e r s o n
 Line Organizations
• Characteristics
– Authority/responsibility for planning/implementing
sales activities lie in hands of sales manager.
– Each person has only one boss.
 Line Organizations
• Advantages
– Very simple to understand and use.
– Easy to trace accountability.
– Relatively inexpensive (only a few highly-paid
executives are necessary)
– Quick action possible since decision-making is in
hands of relatively few people.
 Line Organizations
• Disadvantages
– As organization size increases, problems
become more complex.
– Specialized skills often needed.
– Many sales managers cannot keep on top of all
functions that relate to sales.
– Lack of trained replacements.
 Line Organizations
• Implications
– Best used by small organizations where
operations can be clearly divided into basic
functions of sales, finance, and production.
 Line and Staff Organizations
• Characteristics
– Same as line organization except staff positions
added
– Staff positions don’t have authority over line positions
• Advantages
– Staff provide sales manager with specialized skills
– Allows sales manager to be more efficient/ effective.
– Doesn’t dilute his/her authority/contact
w/salespeople.
 A Line & Staff Organization
S a le s M a n a g e r

M a rk e t F o re c a s te r

R e g io n A R e g io n B R e g io n C T r a in in g D ir e c t o r
S a le s M a n a g e r S a le s M a n a g e r S a le s M a n a g e r

S a le s p e o p le S a le s p e o p le S a le s p e o p le
 Line and Staff Organizations
• Disadvantages
– Can be more expensive than a line organization.
– Conflicts may arise between line & staff
executives.
– Staff executives may attempt to exert authority
over line personnel.
– Line executives may ignore the counsel of the
staff
 Line and Staff Organizations
• Implications
– If sales managers find themselves spending less
time working with subordinates and more time
performing planning & evaluating functions, may
want to consider this organization
 Functional Organizations
• Characteristics
– Organization divided by function.
– Functional specialists have line authority.
– Salespeople report to multiple bosses.
• Advantages
– Specialist ensure their functions are carried out.
– Should improve performance in each functional
area due to the specialization.
 A Functional Organization
S a le s M a n a g e r

R e g io n A R e g io n B T r a in in g D ir e c t o r R e g io n C M a rk e t F o re c a s te r
S a le s M a n a g e r S a le s M a n a g e r S a le s M a n a g e r

S a le s p e o p le S a le s p e o p le S a le s p e o p le
 Functional Organizations
• Disadvantages
– Breakdown in the unity of command due to
conflicting orders
– Each salesperson is no longer accountable to
only one boss
• Implications
– Typically used in large firms that feature
numerous functions and that have the need for
several specialists.
 Centralized vs.
Decentralized?
Factors That Influence
• Size of Sales Force
– As sales force size increases, the need to
decentralize increases.
– Span-of-control problems emerge
– More field managers will be necessary
– Decentralization more feasible
 Organizing by Sales Activities
• Characteristics
– Usually employ simple line organizations
– Separate selling functions (present account
maintenance and new account development)
• Advantages
– Allows salespeople to become proficient in their
respective sales functions.
– Places special emphasis on searching out and
selling new accounts.
 Line Organization Structured
by Sales Activities
S a le s M a n a g e r

A c c o u n t D e v e lo p m e n t A c c o u n t M a in t e n a n c e
M anager M anager

S a le s p e r s o n A S a le s p e r s o n B S a le s p e r s o n C S a le s p e r s o n D S a le s p e r s o n E
 Organizing by Sales Activities
• Disadvantages
– Customers may resent being turned over to a
different salesperson.
– Salespeople may want to cultivate the accounts
they have developed.
 Organizing by Sales Activities
• Implications
– Use when there is a large turnover of customers
– Use when there is a significant difference in the
skills needed in each separate area
– Use when fast growth through new account
acquisition is deemed necessary
 Organizing by Geographic Areas
• Characteristics
– Sales force is reorganized on a geographic basis
– Salespeople sell all the company’s present
products to all customers within their assigned
territories
Line Organization Structured by
Geographic Area
N a t io n a l
S a le s M a n a g e r

W e s t e r n R e g io n C e n t r a l R e g io n E a s t e r n R e g io n
S a le s M a n a g e r S a le s M a n a g e r S a le s M a n a g e r

D a lla s D iv is io n C h ic a g o D iv is io n N e w Y o r k D iv is io n
S a le s M a n a g e r S a le s M a n a g e r S a le s M a n a g e r

S a le s p e o p le S a le s p e o p le S a le s p e o p le
Organizing by Geographic Areas
• Advantages
– Salespeople and managers become more
familiar with their territories
– Local problems may be solved more quickly
– Sales force can rapidly react to changes in the
local competitive environment
– Can provide better service at lower cost
– Lower chance for customer confusion
Organizing by Geographic Areas
• Disadvantages
– Diversity/magnitude of product line may limit
salesperson’s knowledge of any one product
– Duplication of overhead expense
– Greater level of salesperson control (which
products to push, which customers to service)
• Implications
– Best used if product line is relatively
homogeneous
– Best used if customers are widely dispersed
 Organizing by Products
• Characteristics
– Sales force is reorganized on a product basis
– Salespeople specialize in particular products
carried by the sales organization
 Sales Force Organized by
Products
S a le s M a n a g e r

A d v e r t is in g P ro d u c t A P ro d u c t B M a r k e t in g S e r v ic e s
M anager S a le s M a n a g e r S a le s M a n a g e r M anager

P ro d u c t A P ro d u c t B
S a le s p e o p l e S a le s p e o p le
 Organizing by Products
• Advantages
– Each product line receives a higher degree of
specialized attention
– Allows for decentralization of both authority &
responsibility for each product line
– Allows decisions to be made closer to the
problems with any particular product line
 Organizing by Products
• Disadvantages
– If specialization occurs above salesperson level,
additional overhead expense may be suffered.
– More than 1 salesperson may be calling on
customers
– Difficult to maintain a consistent image
 Organizing by Products
• Implications
– Best used if product line is relatively
heterogeneous
– Best used if have a wide variety of customers
with quite different needs
– Best used if products are technically complex
– Broad, in-depth knowledge of product essential
for the sales task
 Organizing by Customers
• Characteristics
– Sales force is reorganized on a customer basis
– Salespeople specialize in selling to/ servicing
particular customer types
 Sales Force Organized by
Customers

I n d u s t r ia l R e t a il
S a le s M a n a g e r S a le s M a n a g e r

I n d u s t r ia l M a n a g e r I n d u s t r ia l M a n a g e r I n d u s t r ia l M a n a g e r R e t a il M a n a g e r R e t a il M a n a g e r
F a rm s C o n s t r u c t io n M in in g J C P e n n e y 's S e a rs
 Organizing by Customers
• Advantages
– Most consumer oriented approach
– Organization of sales force is based on customer
needs
– Control remains at the management level (which
customers to call on, etc)
– Allows salespeople to specialize in customer
needs
 Organizing by Customers
• Disadvantages
– Potential for overlapping territories is high
– Hence, overhead costs may rise
– Salespeople must become knowledgeable about
company’s entire line of products
 Organizing by Customers
• Implications
– Customers in a given market buy several
different products/lines from single supplier
– Same buying factors apply across product lines
– Significant proportion of income is derived from
a small number of accounts who require high
service levels